Forecasts

It is true that the crowd is usually looking in the wrong direction. This occurred Q4, ‘08, when most were expecting more of the same - the good times.

Now, the majority of forecasters (to whom the crowd looks for direction) expect more of the same once again; that is, a sluggish and weak economy. For those who do see a light at the end of the tunnel, most fear it’s a headlight, or a “double dip.”

Times have been tough on these folk, these forecasters. The Q4 ‘08 crisis rolled them over, flattening them into crow bait. Now they’re about to get up but are about to be flattened again, wrong again in their forecast.



Background:

Research analysts and economic scholars create a barrier of intimidating words (a favorite trick of Greenspan, perhaps the worst forecaster ever) to hide their insecurity. The fact is they don’t have any better idea than most of us. And the greater the uncertainty, the more their predictions seem to cluster, the forecasters shouting out together in the dark. Thus, when there is another unexpected major event, the more the consensus misses the mark.

Most economic forecasters are, well..... economists. But they’re not trained for the task. They’re trained to analyze, not forecast. They cannot sense intuitively. They invariably miss major turns in the road because they’re looking in the rear view mirror.



The error to the present consensus forecast is an under-estimation of economic vigor just ahead, our view.

In the present situation a great spark will be provided by the US masses, suddenly aware that they’ve been taken. That spark to be provided through the voting booth. This is not accounted for in forecasting models! Neither is the celerity with which the process will be accomplished, the overturning of BO’s agenda with the health heist first in line. Neither is the thoroughness in the de-lousing of an economy for two years contaminated by statists. All of this provides fire. Most see a rout by the Republicans but few understand the economic traction to come of it.

There is a malaise which has settled on this country. Reagan righted the last one. The majority will see to this one, and sooner than most expect.



Robert Craven